Many retail businesses have been late to realise the impact of loyalty programmes on their business. According to eMarketer, 58.7% of internet users feel that earning loyalty points is a valued part of a shopping experience. This is one way in which loyalty programmes directly impact profitability and scalability in the long run. Altfeld’s research shows that the probability of selling to an existing customer is as high as 60-70%, suggesting that the majority of revenue for any retail business can be expected from recurring and loyal customers.
What Does a Loyalty Programme Mean for Shoppers?
Today’s shopper has the freedom of choice, thanks to the broad reach of online marketplaces. Hence, when they visit a store, it is more about the experience, which directly influences loyalty. A loyalty programme does just that - gives the modern shopper the chance to enjoy the experience of earning points for every purchase. They look forward to accumulating reedemable points for additional discounts or free products. This gamification adds to their shopping experience and also helps the retail business grow.
Running a Successful Loyalty Programme
Most often, loyalty programmes can be directly linked to a store’s POS or CRM software, making it easy to keep track of customers’ purchases and reward points based on it. There are a few things to remember when running a loyalty programme.
Welcome bonuses are most welcome
Loyalty programmes can be points-based or tier-based, but in both cases, rewarding the customer for registering their membership can be a rewarding experience for the business too. It is important for businesses to provide experiences that make customers feel special, and a large welcome bonus does just that. It motivates the customer to jumpstart their rewards journey and can even result in frequent shopping at a retail store, in order to earn more points and reach a redemption goal sooner.
Point transfer options
Customers may enjoy redeeming reward points for in-store purchases, but they will definitely enjoy redeeming them for cash. Customers often prefer the latter, making it a good feature to consider when implementing a loyalty programme. Retail businesses can offer the option to transfer points to a closed wallet that customers can use at their convenience.
Automation based communication
Knowing about the latest offers and events at a retail business can urge customers to visit stores or websites to make a purchase. Retail businesses can automate communication with member customers based on their loyalty tier, offering certain value to shop at the business and earn more loyalty points.
Encourage customers to upgrade
A customer begins their rewards journey at the basic tier. With promotions, businesses can encourage their customers to shop more and upgrade their rewards tier for better benefits. Retail businesses can use their customer information from the CRM to know which customers are more involved with the loyalty programme and are more likely to make purchases, and send them specific communication to invite them to their store. This may motivate customers to shop more to upgrade their loyalty tier, resulting in growth of the business.
Secure loyalty points transactions
Businesses must mitigate any possible risks arising from loyalty points transactions. Mishaps can result in a disappointed customer, which can negatively affect a business in the long run. Moreover, when sensitive customer information is involved, it becomes critical to ensure top-notch security. Retail businesses can ensure customer information is safeguarded by capturing only necessary information. Transactions authenticated via OTP or PIN-based redemption methods work best.
Timely updates to customers
Customers often lose track of the points that they have. Retail businesses can set automated alerts for timely reminders via email, SMS or the store’s app, to redeem their points before they expire. This allows customers to redeem their points on time and benefit from them, while making recurring purchases.
Customer loyalty has always been a key factor for successful retail businesses. Having a loyalty programme helps retail businesses motivate customers to make more purchases and earn more points for even more benefits. 6DX, the NextGen Retail Xperience Tech, enables retail businesses to set up and implement successful loyalty programmes, by linking them directly to the POS for ease of operation. Book a free demo now!